SoftBank and Carlyle-backed Delhivery’s IPO subscription window will close May 13. The company has fixed a price band of Rs 462-487 per share, it announced at a press conference on Thursday.
“We have a very large addressable market as I have talked about multiple times. We will continue to double down on the addressable market. Today at Rs 5,000 crore of revenue for the first nine months of FY2, we are still at less than half a percent of the $300 billion market opportunity we have,” he said at the press conference.
Barasia, who joined Delhivery over seven years ago, said the logistics industry is highly fragmented and one cannot expect small companies to consolidate by themselves.
“(Our) M&A philosophy is about looking at businesses that will add immediate scale to the company in one of our core businesses or that add distinct capability to the business that we would like to build on,” he said. “That is what we have done in the past. Spoton for example added a huge amount of scale very quickly to the part truck load business and pushed us up to the number two position in the market.”
Delhivery acquired Spoton last August in an all-cash transaction worth $300 million. Since its plans to go public were made official, it has made several acquisitions including that of drone startup Transition Robotics.
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Barasai said Delhivery would be interested in meaningful majority investments and M&As rather than minority investments.
“The partnership with Fedex, a global integrator, and our investment in Falcon Autotech… it shows we have the appetite and ability to drive consolidation in the market. We will continue to use that as a growth pillar,” he added.
Of the Rs 5,235-crore offering, Rs 4,000 crore will be through a primary share sale while the remaining will be through an offer for sale (OFS) of Rs 1,235 crore. In an OFS, existing investors sell a part of their stakes to new investors and the money does not go to the company.
In Delhivery’s OFS, investors such as Fosun will sell shares worth Rs 200 crore while SoftBank and Carlyle will divest holdings to the tune of Rs 365 crore and Rs 454 crore, respectively. Times Internet, which owns ETtech, is also divesting shares worth Rs 165 crore in the OFS.
It plans to use Rs 2,000 crore from the IPO for organic expansion and another Rs 1,000 crore for inorganic growth through acquisitions and other strategic initiatives. The rest of the proceeds will be for general corporate purposes, it said.
As previously reported by ET, Delhivery had originally planned a Rs 7,460-crore IPO but reduced the size owing to choppy market conditions.
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